Impact Of Oil Prices Research Articles

Circular behavior of oil consumption and the impact of oil prices with the Fourier approach

In the changing world, oil continues to be important in energy production. Using monthly data from 1965 to 2022, the permanency of oil consumption fluctuations was investigated. Fourier-based Granger causality tests were used to examine cause-and-effect relationships between variables. Long-term relationships were estimated using Fourier-based Engle Granger cointegration tests. Unlike previous research, this study considers the long and short-term effects of countries that consume the most and least oil, as well as on a global scale, from different perspectives, examining oil price fluctuations together, and estimating these analyzes using the Fourier approach. Oil consumption fluctuations appear temporary in New Zealand and Luxembourg but permanent in all other countries. Oil consumption and prices share a causal relationship in the US, Japan, New Zealand, and Luxembourg, but no relationship elsewhere. A long-term relationship exists between oil consumption and prices in the US, India, Saudi Arabia, Russia, Japan, South Korea, Canada, Mexico, and Estonia. In other countries, no long-term relationship is found between these two variables. Error correction model estimation shows only the equation for Japan can be interpreted based on statistical significance. A one-unit deviation between oil consumption and prices can reach equilibrium in 20 months.

How does green investment respond differently to decomposed oil shocks?

This study investigates the asymmetric impact of oil price shocks on green investment by using a Nonlinear Autoregressive Distributed Lag (NARDL) framework. Oil price shocks are decomposed from perspectives of supply, demand, and risk of the oil market, and the green investment is proxied by the Dow Jones Sustainability World Index. The asymmetry of the oil price impact is examined from different sources of the shocks and the condition when the specific shock level is positive or negative. Our findings indicate that impacts of oil shocks on green investment are different depending on sources of the shocks and time horizons. Specifically, supply shocks exhibit no obvious asymmetric effects. Positive and negative changes of the demand shock depict asymmetric impacts on green investment, while such an asymmetry gradually evolves to be symmetric in the long-run. In contrast, the impact of risk shocks is symmetric in the short-run while being evolved to be asymmetric in the long-run. Moreover, the linkage of oil shocks with green investment is shown to be altered by unanticipated events such as the financial crisis or the COVID-19 pandemic, suggesting the uncertainty embedded in the two is somewhat similar.

Exploring Inflation Dynamics with the Phillips Curve in Türkiye: Evidence from the Markov Regime Switching Model

Unlike in many advanced and emerging market economies, inflation was already a problem for the Turkish economy before the COVID-19 pandemic. During the 1990s, Türkiye experienced severe inflation, which reached three digits in some months. Although inflation was reduced to single digits in the 2000s through a successful disinflation program under an implicit inflation targeting framework with a flexible exchange rate regime, price stability became a problem again after the global financial crisis. Inflation gradually increased during the 2010s and became out of control after late 2021. This study aims to explore inflation dynamics in Türkiye using the Phillips curve framework for different inflation environments. To this end, the Phillips curve equation, augmented with the exchange rate and oil prices, is estimated using the Markov regime switching model between January 2006 and September 2023. Two regimes are identified in the sample, namely low- and high-inflation regimes. According to the estimation results, the Phillips curve is invalid in both regimes. The unemployment gap is statistically insignificant despite its negative impact on current inflation. The increasing coefficient of backward inflation in the high regime reflects the resurgent indexation behavior, which was dominant before inflation targeting was introduced in Türkiye. The positive impact of oil prices is only statistically significant in the low regime. While an increase in the exchange rate significantly raises inflation in both regimes, the effect is greater in the high-inflation regime. These empirical findings indicate that the primary issues for controlling inflation in Türkiye are inflation inertia and exchange rate stability.

RELATIONSHIP BETWEEN OIL PRICES, EXCHANGE RATES AND STOCK INDICES

This research examines the connections between oil prices, exchange rates, and stock indices in India. It examines correlations and causal effects between these key financial variables. The Granger causality tests fail to detect any significant causal effects between exchange rate returns and either crude oil returns or stock returns. These findings are valuable for long-term decision-making, and further research is needed to fully understand the impact of oil prices on stocks. This study adds to our knowledge of these relationships in the Indian market. Keywords: Oil prices, exchange rates, market, relationships, stock indices

Determinants of the competitiveness of world palm oil exports: A cointegration analysis

The purpose of this research is to determine the impact of international palm oil prices, prices of its substitute and complementary goods, and the exchange rate on the competitiveness of 30 palm oil exporting countries over the period from 2011 to 2019, using monthly data. The symmetric comparative advantage index was estimated, and a convergence effect was found, whereby emerging countries exhibited greater specialization than industrialized countries. Unit root and cointegration tests were applied, in addition to FMOLS and DOLS methods. The analysis revealed that decreases in palm and vegetable oil prices, coupled with an increase in the exchange rate and prices of soybeans and biodiesel, enhanced the competitiveness of palm oil exports.

The impact of Russo-Ukrainian war, COVID-19, and oil prices on global food security

ContextLight of recent global upheavals, including volatile oil prices, the Russo-Ukrainian conflict, and the COVID-19 pandemic this study delves into their profound impact on the import and export dynamics of global foodstuffs. With rising staple food prices reminiscent of the 2010–2011 global food crisis, understanding these shifts comprehensively is imperative. ObjectiveOur objective is to evaluate this impact by examining six independent variables (year, month, Brent crude oil, COVID-19, the Russo-Ukrainian conflict) alongside six food indicators as dependent variables. Employing Pearson's correlation, linear regression, and seasonal autoregressive integrated moving averages (SARIMA), we scrutinize intricate relationships among these variables. Results and conclusionsOur findings reveal varying degrees of association, notably highlighting a robust correlation between Brent crude oil and food indicators. Linear regression analysis suggests a positive influence of the Russo-Ukrainian conflict, Brent oil on food price indices, and COVID-19. Furthermore, integrating SARIMA enhances predictive accuracy, offering insights into future projections. SignificanceFinally, this research has a significant role in providing a valuable analysis into the intricate dynamics of global food pricing, informing decision-making amidst global challenges and bridging critical gaps in prior research on forecasting food price indices.

Analysis of The Impact of Fuel Oil Price Increases on Fishermen's Income in Kendari City

The fisheries sector is essential to Indonesia's economy and food security but is faced with significant challenges, such as fluctuations in fuel oil (BBM) prices. This study analyzes the differences in fishermen's income in Petoaha Village, Nambo Sub District, Kendari City, before and after the fuel price increase in November 2022. This study uses a quantitative design with a descriptive approach to assess the economic impact of the fuel price increase on fishermen's income. The research was conducted from December 2022 to June 2023 and involved 55 respondents selected through a simple random sampling method. The variables studied include operational costs, revenue, and fishermen's income, with the application of a paired sample t-test as the primary analysis tool. The results showed significant changes in fishermen's cost structure and income after the fuel price increase. The average income of fishermen decreased by IDR 1,627,778 per month after the fuel price increase. Further details of the cost, revenue, and income analysis outlined in this study illustrate how fluctuating fuel costs change the economic dynamics of fishers, which is essential for policymakers and stakeholders in fisheries to understand and address.

Crude oil price, manufacturing index, and consumer price index: Is there any temporal link in India?

In this paper, the autoregressive distributive lag (ARDL) model is used to examine the impact of global crude oil price on manufacturing output in India and the behaviour of consumer price index. Error correction model, co-integration and multivariate GARCH model models are used for the analysis. ARDL analysis shows a significant relation between consumer price index (CPI) and manufacturing index (MI). Also, a significant inverse relation is established between crude oil price with MI and a positive relation between MI and CPI. Despite an inconsistent short run relation between petrol price with CPI, rising fuel price shows dampening impact on manufacturing output in the long run.

Unveiling the effects of mineral markets, fintech and governance on business performance: Evidence from China

The study intends to empirically estimate the effects of mineral markets, fintech, and governance on business performance in China. For this purpose, the study collects the data of 18 Chinese companies belonging to different sectors over the 2009 to 2020 period. To address the issue of cross-sectional dependence, “Panel Corrected Standard Error (PCSE) estimation is applied in the study. According to the study findings, there is a significant and negative impact of gold prices and coal prices and a positive impact of silver prices on business performance in China. No significant impact of oil prices on business performance is observed in the study. Governance is found to have a significant positive impact on business performance. However, no significant effect of fintech is found in the analysis. The study recommends that business firms should adopt appropriate measures to prevent bad effects of mineral market conditions on their profitability or performance. Strengthening the regulatory or institutional system and promoting innovations in the financial sector are also recommended by the present study.

Asymmetric Effect of Oil Price on Economic Activity: Evidence from Lebanon Using NARDL Model

The aim of this paper is to investigate the impact of oil prices on the real economic activity of Lebanon, represented by the Gross Domestic Product (GDP) while controlling for inflation. For this purpose, this study employs a non-linear auto-regressive distributed lag model (NARDL) that enables to take into consideration the asymmetrical nature of the relationship between these two variables. The empirical findings confirm the asymmetric impact of changes in oil prices on economic activity. Notably, reductions in oil prices positively influence GDP in the long term and exert a more pronounced fluctuating effect compared to increases in oil prices, which are statistically insignificant. In other words, the country’s GDP, serving as a measure of the total value of finished goods and services, does not respond significantly to oil price rises but is influenced by oil price reductions. This empirical analysis focuses particularly on Lebanon, and time series data spanning from 1988 to 2021 are used to explore this relationship. This study guides Lebanon's policymakers, revealing the impact of declining oil prices on economic activity. It highlights growth opportunities amidst challenges like economic crises and corruption. Advocating for prudent policies and strategies, it offers a pathway for sustainable development.

Greening the energy future: Role of energy innovation as policy driver

AbstractEnergy innovation is the backbone of a sustainable future. By harnessing the power of innovation, we can accelerate the transition to a greener energy future by improving energy efficiency, integrating renewable energy sources, developing energy storage solutions, and ensuring grid flexibility. As the renewable energy is being characterized as a major driver of sustainability, the innovational endeavors need to be directed in this pursuit. Based on this objective, this study explores the impact of energy innovation and education on renewable energy use by controlling the impact of economic growth, financial development, and oil prices for the OECD countries over the period of 1995–2020. The empirical results obtained from second‐generation panel methods indicate that energy innovation and education increase renewable energy use in these countries. Similarly, economic growth, financial development, and oil prices also sure the use of renewable energy. From these results, our study offers number of contributions to the literature, policy, and practice. More specifically, we argue that energy innovation and education can play an important role to increase the use of energy produce from renewable sources. Moreover, financial development can play a key role in the production of renewable energy in the long‐term projects by providing funding. The empirical results obtained from second‐generation panel methods suggest that energy innovation and education play a crucial role in increasing renewable energy use in these countries. Effective policy support is crucial in fostering innovation, promoting clean energy adoption, and creating opportunities for economic growth. Together, we can work toward a greener and more resilient energy future.

Unequal ground: oil booms and income inequality in the USA

AbstractThis paper examines the impact of oil price and quantity shocks on income inequality in the USA. Using micro income data, we construct measures of pre‐tax money income inequality at the state level for the period 1980–2017. We find that a $10 increase in oil price increases inequality, measured by the ratio of pre‐tax income of the 90th percentile to 10th percentile (p90/p10), by 3.8 percentage points in states with high levels of oil endowments per capita. The increase in capital income to households at the top of the distribution drives the observed change in inequality. In addition to price shocks, we study the impact of quantity shocks that arise from oil discoveries. Quantity shocks have no effect on the overall income distribution.

Unveiling the enigma: Exploring how uncertain crude oil prices shape investment expenditure and efficiency in Chinese enterprises

As a crucial energy resource, crude oil plays a vital role in propelling global economic progress. China's energy consumption is extensive due to its position as the second-largest global economy and leading importer of crude oil. A stable crude oil supply can support China's steady economic growth. The China Crude Oil Futures (INE) launch in 2018 has enriched the WTI and Brent crude oil market systems, further consolidating the critical position of crude oil in China's economic and financial development. Therefore, this paper first examines the impact of crude oil price uncertainty on the investment activities of Chinese micro-enterprises by selecting three crude oil futures: WTI, Brent, and INE. Based on the quarterly (half-year) report of Shanghai and Shenzhen A-share listed enterprises from 2008 to 2023, this study examines the effects of uncertainty in crude oil prices on investment spending and efficiency inside enterprises and the underlying mechanisms that drive these effects. This study provides evidence that the fluctuation in crude oil prices has a detrimental impact on investment expenditure, while concurrently improving the investment efficiency of enterprises. The mechanism test also demonstrates that the volatility of crude oil prices has the potential to diminish investment expenditure and enhance the investment efficiency of enterprises. On the macro level, it mainly depends on reducing the macroeconomic boom index, enterprise boom index, and entrepreneur confidence index. At the micro level, it relies on increasing enterprise cash flow, lowering enterprise investment expectations and consumer product demand. Further heterogeneous analysis indicates that during significant events such as the global COVID-19 pandemic and the Russia-Ukraine conflict, there is a substantial increase in crude oil price uncertainty, leading to reduced enterprise investment expenditure and improved enterprise investment efficiency. Furthermore, the volatility associated with the increase in oil prices has a more pronounced effect on investment outlays and operational effectiveness. Moreover, the volatility of crude oil prices significantly influences the investment expenditure and investment efficiency of enterprises in the secondary industry and non-state-owned sectors. This empirical study examined the causal relationship between crude oil price, investment spending, and investment efficiency. The results of this investigation enhance the current scholarly knowledge on the relationship between crude oil prices and investment, so contributing to the advancement and refinement of this particular field of inquiry. This paper makes a valuable exploration and attempt to explain the mechanism of the impact of crude oil price on the investment activities of micro-enterprises.

Housing prices in South African economy: Investigating macroeconomic drivers using time-varying approach

Despite being one of the least liquid assets, housing is unarguably the most significant asset class and the biggest contributor to household wealth. The goal of the current empirical research is to examine the macroeconomic drivers of housing prices. Thus, the study examines the impact of macroeconomic variables and oil prices on housing prices using monthly time series data from 2003(M1) to 2023(M3). Generalized Autoregressive Score Model (GAS) is employed to appraise the time-varying relationships between housing prices and macroeconomic variables, as well as housing prices and oil prices. The findings resulting from the empirical analysis indicate that the housing market in South Africa is substantially influenced by macroeconomic factors and oil prices. Therefore, the South African government and policy makers must maintain strong macroeconomic policy formulation and environment as they have an impact on housing prices, which, in turn, have an impact on the welfare and quality of life of the populace.

Oil Price Shock and Trade Balance in Nigeria

This study used the Brent crude oil price to examine whether the variability in the trade balance of Nigeria is linked to the fluctuation in oil price.To achieve this, the study used annual frequency data from 1981 to 2021 sourced from the United Nations Conference on Trade and Development (UNCTAD), the World Bank’s World Development Indicator (WDI), and the Central Bank of Nigeria (CBN) Statistical Bulletin. The bound test procedure to cointegration was adopted and the nexus between oil shock and trade balance was examined within the autoregressive distributed lag (ARDL) framework. Additionally, the augmented Dickey-Fuller approach to unit root was used in determining the degree of integration of the series. Certain findings were made from the analyses. First, the study confirmed that there is long-run relationship among the variables. Second, oil price hikes lead to a surplus trade balance in the long run, but only insignificantly. Contrariwise, the positive impact of oil price hikes on the trade balance in the short run was significant. Third, the study found that inflation had an insignificant positive effect on the trade balance. Fourth, the estimation revealed that an increase in real effective exchange rate and trade openness is insignificant and lead to a deficit trade balance in the long run. The study recommends that domestic oil shocks in the form of low oil production should be mitigated by addressing the security challenges in the country.

The impact of oil prices, foreign direct investment and trade openness on unemployment rates in an oil-exporting country: The case of Saudi Arabia

This study analyzes the effects of major macroeconomic variables (oil price, foreign direct investment inflows, real gross domestic product and trade openness) on the unemployment rate in Saudi Arabia. The study adopted the ARDL model and bounds testing for co-integration approach and other diagnostic econometric techniques to check potential issues resulting from the use of time series data, from 1991 to 2019. Findings show that changes in the four variables exhibit a significant negative long-run effect on the unemployment rate. Additionally, we detected a non-linear relationship between unemployment and oil prices. The oil price effect is positive only if it exceeds $41.2 per barrel. A per-barrel price of oil below this threshold appears to worsen the labor market situation in Saudi Arabia. Revenues from oil exports account for major source of income for the country; unfortunately, oil prices are subject to factors beyond the control of the country (inconsistencies in global oil prices). The country needs to diversify its economy especially in growth-enhancing sectors of the economy to generate employment and moderate unemployment.

The Relationship between Electricity Consumption, Price of Oils, and Gross Domestic Product in the Gulf Cooperation Council Countries

The research aimed to evaluate the impact of electricity consumption and oil prices on the GDP of GCC countries. The oil industry is the backbone of economies in these countries, accounting for a significant portion of GDP. The variations and volatility in petroleum prices significantly affect GCC countries’ GDP. Moreover, these countries have also increased the usage of electricity. A substantial increase in the demand for electricity impacts the economic development of GCC countries. The study has considered a quantitative method using secondary data to address the research objective. The data for electricity consumption, energy use, and oil prices were obtained from the World Development Indicators website from 2010 to 2021. The countries include Bahrain, Oman, Qatar, the United Arab Emirates (UAE), Saudi Arabia, and Kuwait. The data obtained were empirically analyzed using the system-GMM approach as it was identified to be a more robust estimation model controlling for issues such as autocorrelation and endogeneity. The results obtained from the system-GMM indicated that electricity consumption and oil prices positively impact the GDP of GCC countries. At the same time, energy use hurts the GDP. Therefore, the research findings imply that electricity consumption and oil prices significantly contribute to the growth of the GCC countries.

Analysing the Connection between Economic Growth, Conventional Energy, and Renewable Energy: A Comparative Analysis of the Caspian Countries

The objective of this research paper is to apply a mathematical model to estimate and predict the economic growth of the Caspian countries in the period from 1995 to 2022. We use multiple regression by applying the OLS method to estimate the impact of global oil price, energy resource production per capita, trade, and renewable energy on GDP per capita. The mathematical approach uses fixed and random effects models to assess the overall impact of the independent variables on economic growth in this region and over the period analysed. This study also aims to investigate whether the explanatory variables are cointegrated in the long run; as such, we carry out several mathematical cointegration tests, namely the Pedroni and Johansen tests. The mathematical analysis is completed by the estimation of short- and long-run parameters using the stochastic VAR/VEC models, the impulse response function, and the causality test to assess economic growth in this region. This study’s main finding is that GDP per capita is increasingly influenced by its previous values, which is confirmed by considering lag 1 and lag 2. The results of the Granger causality tests identify several bidirectional relationships between GDP per capita and oil and gas production. These relationships are clearly positive evidence of the growth trend and progress of economic activity in the Caspian region. The practical implications of the study aim to promote and support the use of renewable energy sources. In this sense, policymakers in the Caspian countries should create favourable conditions for the transition to a green economy. An important aspect is the efforts of the government authorities to make their policies more environmentally friendly, as decarbonisation is a good practice in the current context of sustainability and related choices. As the Caspian countries are heavily dependent on conventional energy production, it is essential for them to increase their export earnings from energy resources via diversifying and strengthening new energy opportunities and partnerships.

The Effect of Changes in Oil Prices on Economic Development of South Sudan: A Case Study of Juba City Republic of South Sudan

The study looks at how fluctuations in oil prices affect South Sudan's economic growth. This entails investigating the variables that affect oil prices as well as the connection between shifting oil prices and economic growth. The impact of oil prices on the economic growth and development of the nation is significant. For instance, the literature study shows that Pakistan's inflation of oil prices had little effect on economic growth over the medium and long terms. However, there were indicators of it raising the general price level in the economy. Eighty-eight (88) questionnaires were distributed to collect data from different respondents who were conveniently selected in Juba City and the response rate was 100%. The empirical evidence indicates that the correlation between oil prices and South Sudan's economic progress has improved. The government of South Sudan should rewrite and simplify the policy framework in order to guarantee increased oil revenue and a better socioeconomic standing for the populace. An impartial committee or entity that can supervise and keep an eye on the actions of individuals engaged in oil revenue management should be established by this policy framework. This tactic has the potential to greatly lower the incidence of corruption and improper handling of oil revenue while also raising socioeconomic conditions in South Sudan.

Fuel Price Increase: Unveiling the Torments and Agonies of the Transportation Sector — Basis for Policy Formation

This study aimed to investigate the impact of oil price hikes on the transportation sector in Padada, Davao del Sur. Utilizing a phenomenological approach and qualitative design, purposive sampling was conducted among fourteen participants from various transportation sectors. Data was analyzed through Data Reduction, Data Display, and Conclusion Verification, with assistance from a data analyst. The findings indicate that rising fuel prices significantly affect livelihoods and lifestyles, highlighting the broader impact of global issues on local communities. Additionally, increased oil prices have led to fare adjustments, impacting passengers' monthly budgets. The study suggests that government programs to support local transportation owners and drivers and initiatives for domestic oil exploration could mitigate these effects. Budget constraints and fuel price stabilization policies were also identified as relevant considerations for public administration. Consequently, it is recommended that the Local Government Unit of Padada, Davao del Sur, propose policies to address the impact of oil price increases on the transportation sector. Additionally, revising and strengthening Municipality Ordinance 003, Series of 2009, which allows for passenger fare adjustments based on daily oil prices, is advised.